Early-On Qualification ...
Is there a trophy fish on your line, or a minnow?

09/01/03 - Gaining new business is as deceptive as fishing. As fishermen dream of that big fish, business people long for that big deal. The mind can play tricks on fishermen, and business people, alike.

Take the example of the big company you've been courting. One day, through lots of careful work to get to the right person in the organization, you finally are able to "cast" your ideas for the perfect product or service. It's like the fisherman finally finding that secret fishing hole, supposedly teaming with fish. But finding that hole never guarantees a fish on the line.

Looking over the fishing hole, most fishermen think the fish they've dreamed of is right there - just below the surface. If they see a ripple or a shadow darting below - their mind pictures the biggest and most beautiful trophies of all time. People scouting for new business do the very same things. It is often an illusion.

What comes first - immediately upon finding that "fishing hole" - can make all the difference in winning new business or chasing an illusion. You see, in fishing - a simple cast of the line and patience will tell if the big fish is really there to be reeled in. In business, it takes more than that!

For the business person - a great deal of work will be needed to structure a proposal, to determine and prioritize all the prospect's needs, to travel for meetings, to involve others. To embark on the quest to do business with a new customer - big or small - the levels of effort can be time consuming and costly. This is not simply baiting a line or casting the lure.

With all this commitment, there is no guarantee of earning one dime.

It is not easy to stack the odds in your favor - but we know of no better tactic than to press for an Early-on Qualification of the "deal." By this we mean finding out - for certain - that the organization is fully committed to doing the thing (or purchasing the product) that you can provide. In other words - you must make sure it is not a "shadow" you're chasing.

You can't simply take the word of the person deep within a big organization that this is the case. It must come from a much higher point of authority, or be documented in a way that proves the commitment is there. Now, in some cases (such as requests for bids, and requests for quotations), it is fairly certain that an adequate budget is there and the deal will be struck - with someone. This is not what we are discussing. We are talking about the "undefined" deal - where the scope of work and the pricing may not even be known to the prospect. Even though things aren't defined, almost always, the prospect has money in mind.

For more than banking, money is a great medium of exchange. People gauge things by the amount of money it takes to get them - or accomplish them. They see money as a definition point, and it often defines the extent of their authority to act. By opening the topic of money early-on in your business development activities - setting a range and expectation of costs - you will quickly qualify the scope and the likelihood that the business you are after is "real.".

Having said this, money is often "the last" thing to be discussed in a courtship for new business. This is a major reason so many business proposals fail. While all the talk has been cordial, and all the ideas have been welcomed with smiles, the moment of cost disclosure can dash the deal on the rocks - especially if the expectations of the prospect had them believing the cost would be less than what you proposed.

You worked your heart out. You listened to exactly what the prospect needs. You worked long nights putting it all down on paper. You evaluated every aspect of the job - perhaps putting your own suppliers through long hours of work providing their sub-contract proposals. You did everything there was to do - but you've left out the first thing - Early-on Qualifying. 

If you fail to find out if the customer has the money and is willing to spend it on the project, stand by for a disappointment! Think of this. Had you known the monetary range the prospect had in mind at the beginning - your proposal would be more closely on target - or you would have told the prospect the figure they had in mind was unrealistic. Think of the time saved for both of you.

We speak from experience! We, too, have fallen prey to the wishful thinking - "fishing strategy" - of offering proposals without Early-on Qualifying. Not one of those lapses in sanity has yet to result in a deal.

Let's back up. At the very first meeting with your prospect, there are things you can do to make sure the "fish" is really there. Of course, there are those prospects who refuse to "play their hand" in terms of what they are willing to pay. This is understandable. In those cases, probe for a wide range. You might start with the statement (for example), "We see this as a major project impacting your company's net profits in a very significant way. It may cost as little as $xxx.00 dollars to put in motion, but we envision ongoing expenses to keep the momentum. Is your company's management willing to commit to this level for starters, and then to keep the ball rolling?"

The above qualifying statement is a great deal different from the simplistic question, "What is your budget for this?" Nonetheless, that one might work, as well.

We don't have time here to get into all the ways of early-on qualifying, but let's just say that without it, you are playing Russian Roulette. You are "praying" your proposal won't have that over-price bullet in the chamber that blows the deal away!

If your prospect won't discuss the monetary scope of the project, our advice is to let them know you need the information, and if you still can't get it - simply turn away - to find another prospect who will cooperate. You might explain your position this way. "Our company is prepared to exert a great deal of effort in precisely meeting your needs. All of our work in this regard results in a comprehensive proposal. We are prepared to do all this proposal work at no charge, but only when we have a clear idea of the scope of work and your input about a cost range your firm has anticipated for this project." 

Lest you think for a moment this early-on qualification strategy is going to put your company "out of the running" ... that others (your competitors) aren't going to use it, think of things this way. Why should any prospect want to deal with the firm that goes blindly into a proposal effort - not knowing monetary facts and the scope of the deal. If you would even consider such a thing, how good could your thinking be in your work on their project? Let me assure you, if a competitor wins the business you're after, it may easily be the result of their Early-on Qualifying.

In summary, qualify early and until you have done this, make no great expenditures in your bid and proposal activity. You'll get more business and waste less money "fishing" for illusions.

That's it for this month. Thanks for tuning in - and if you have some comments - we'd enjoy hearing from you.



William H. Thompson
Principal

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